Medicare co-payment: the politics

June 19, 2014

The AMA is pushing for urgent talks with the Federal Government to overhaul its controversial plans for a co-payment for GP, pathology and radiology services amid concerns the policy will hurt the disadvantaged and increase the burden on doctors.

In one of his first statements as newly-elected AMA President, Associate Professor Brian Owler, said that although the AMA was not opposed to patient co-payments, the Government’s current plan was flawed and he was keen to discuss changes with Health Minister Peter Dutton.

“The current proposal has come from a very economic angle, and I think some of the assumptions and the reasoning behind it is a bit skewed,” A/Professor Owler told the Australian Financial Review. “What we need to do is to work with the Government to make sure that we not only protect our doctors and members’ practices, but we also make sure that we protect the most vulnerable in society.

“That sort of detail and issues for patients haven’t really been thought through in the current proposal.

“The Minister has indicated his willingness to talk about these issues, and I hope, particularly for…the most vulnerable in society, that we can get the outcome we need.”

The Abbott Government’s first Budget, particularly its proposal for a $7 co-payment for GP visits and out of hospital pathology and diagnostic imaging services, was the subject of extensive discussion at the AMA National Conference, including contributions from Health Minster Dutton, his Opposition counterpart Catherine King, health economist Professor Elizabeth Geelhoed, AMA Council of General Practice Chair Dr Brian Morton and numerous Conference delegates.

The Conference passed a resolution calling on the Government to re-work its co-payment plans to include adequate protection for vulnerable patients, enable doctors to waive the co-payment in exceptional circumstances without penalty, and to cover the costs for practices of collecting and tracking patient co-payments.

In a major speech to the Conference, Mr Dutton argued that the co-payment was a vital part of the Government’s strategy to rein in health spending growth and make it sustainable.

“The Government has heeded warnings about unsustainable expenditure growth,” the Minister said. “We are taking a realistic, long-term view…aimed at making real change to set our health system on a sure path.”

There has been much confusion and uncertainty about the co-payment.

Medical practices have reported patients cancelling appointments because of the mistaken impression the co-payment had already come into effect, while the fundamental purpose of the policy has remained unclear.

The Government has presented it as a way to discourage unnecessary visits to the GP, and has tried to back political opponents into a corner by directing the $3.5 billion to be saved by cutting the Medicare rebate by $5 into the unheralded Medical Research Future Fund.

But the strategy has muddied the waters around whether the co-payment’s primary purpose is to improve the efficiency of primary health spending or redirect funding from primary health into medical research.

In their post-Budget speeches, Prime Minister Tony Abbott and Mr Dutton have emphasised the importance of sending a ‘price signal’ to patients about the cost of health care.

Mr Abbott, who admitted the Medicare co-payment was “perhaps the most difficult policy change in this Budget”, said it was nonetheless an important measure because it sent a “necessary price signal, because visits to the doctor might be free to most patients, but they certainly haven’t been free to the taxpayers of this country”.

Mr Dutton told the AMA Conference the aim was to discourage bulk billing, which had spread to the extent that even the better off received free care.

“Bulk billing was intended to be for patients who could not afford to pay a full fee,” the Minister said. “It was not intended to be a drawcard to attract patients from one practice to another.

“That is why the Government is introducing the [co-payment]. It represents a balance between introducing a price signal and maintaining access for people who need care.”

But the Government has so far failed to convince many that its co-payment is the right policy prescription.

United General Practice Australia, which comprises seven peak medical organisations including the AMA, the Royal Australian College of General Practitioners, the Australian General Practice Network and the Rural Doctors Association of Australia, said the co-payment as devised in the Budget needed to be overhauled.

UGPA said the $5 cut to the Medicare rebate exacerbated the financial pressure on GPs and, combined with the co-payment, made it harder for vulnerable people to see a doctor.

Health economist Professor Elizabeth Geelhoed, of the School of Population Health at the University of Western Australia, said the co-payment was flawed both in terms of equity and efficiency.

In particular, it would discourage those who needed medical care the most from seeking treatment, adding to the nation’s health bill in the longer term, she said.

Senate opposition

The proposed co-payment may struggle to see the light of day in the face of strong opposition and criticism in the Senate from Labor, the Greens, the Palmer United Party and independent Senators.

Shadow Health Minister Catherine King told the AMA Conference the Labor Party was implacably opposed to the $7 co-payment.

“[The co-payment] is a solution based on a problem that does not exist,” Ms King said. “Australia does not have a higher level of GP consultations than the OECD average and, with an ageing population, increasing rates of obesity, diabetes and heart disease, policymakers should be focusing on measures that keep the population healthy and out of hospital.”

The Greens have committed to opposing the co-payment, as has Palmer United Party head Clive Palmer, who told the ABC his party’s Senators would “definitely oppose the co-payment.”

“You imagine being a pensioner and earning $300 a week and you’re 87 and you’ve got to go to the doctor four or five times a week,” Mr Palmer said. “That takes up one-third of your income because of the co-payment. I care about Australians and I’m not going to back down.”

The united front of the three parties means passage of the co-payment will be virtually impossible unless the Government is able to negotiate a deal.

Mr Dutton told the National Press Club late last month that the Government would not back down from the co-payment, but was open to compromise. He said Mr Palmer had the opportunity to talk through his concerns with the Government.

“The first option [for Mr Palmer] is the Greens option, which is to block everything and negotiate on nothing, essentially to be an obstructionist,” the Minister said. “The second model is … somebody who is willing to add to or improve in their eyes the policy that’s before them.”